What you need to know about the hidden benefits of maintaining customer loyalty

Peter Drucker once said the purpose of a business is to make and keep a customer by maintaining customer loyalty. Brand loyalty is actually a big issue especially in countries where there are varieties of particular products or services to select from.

For example, there are varieties of soft drinks from different manufacturing companies. The ball is therefore in the court of the company or business to make the product or service their customer’s best choice invariably making them loyal to that brand.

It is such an important aspect of marketing because you won’t need to struggle so hard with trying to attract more customers because your present loyalist will help evangelise you to their friends, family, and probably acquaintances.

Often times, businesses focus on acquiring new customers forgetting that it actually cost seven times (7x) more to acquire new customers than retaining already existing customers.

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Customers always look forward to being stationary to a particular brand and once they gain that experience, trust me your brand will be on their top chat.

Customer retention and loyalty can only be achieved through the extent of experience they have with your brand whether positive or negative.

The earlier you understand how customers work and think, the easier it will be to maintain consistent loyalty.

Products like Indomie noodles, peak milk, coca-cola, pampers etc have been able to retain customer loyalty especially here in Nigeria. Most consumers prefer to use peak milk in place of other milk products.

It shows how a creative product experience can change a customer’s perception about your product and create the kind of loyalty you want to achieve.

The greatest thing you can do for your customers is to give them a reason to stay with your brand, product or service.

Create a form of connection with your customers in other to maintain a cordial relationship of continuous patronage and loyalty.

In most cases, when a customer has a positive experience with a certain product or service, that customer tends to become the brand evangelist.

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Am sure you have encountered some people who prefer one product to another which perform same function and will try convincing you to purchase that which they prefer.

This is what it means to have a loyal customer base because they go as far as advertising your product or service to others.

Therefore, to ensure you are maintaining customer loyalty, there are certain important things you need to adhere to.

According a research by Harvard Business School, an increased customer retention rate by 5 percent increases profit by 25 to 95 percent more.

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Managing your customer retention rate is an incredibly important part of growing a sustainable business.

Therefore, I will be showing you how to keep your customers loyal to your brand without having threats of losing them.

Without a deliberate effort in retaining your customers, you can’t achieve loyalty from them.

Key elements to promote customer retention

To realise customer loyalty, you have to increase your retention rates and in this post, I have put together techniques on increasing customer loyalty.

Keep to your values to retain customer loyalty

According to a research conducted by the Corporate Executive Board, 64 percent of customers have grown strong relationships with a brand due to their values. Customers are more likely to ignore you if your company doesn’t stand for anything.

If you want loyal customers, you need to create real connections with them. In connecting with them, you have to be sure of what you are willing to give out that will be of value to your customers.

The more you keep to your value, the more trust they begin to have for you and eventually stick to your brand.

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Long-term success and customer retention belongs to those who do not take ethical shortcuts.

There must always be total consistency between what you say and do and what your customers experience to ensure your maintaining customer loyalty.

The design, build quality, reliability and serviceability of your product or service must be of the standard your customers want, need and expect.

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Service integrity is also demonstrated by the way you handle the small things, as well as the large.

Customers will be attracted to you if you are open and honest with them, care for them, take a genuine interest in them, don’t let them down and practice what you preach and they won’t avoid you if you don’t.

Speak to your customer’s ego

Most people prefer products and companies that “resemble” them in some way. This cognitive bias is called implicit egotism, and is an important thing to keep in mind when talking to customers.

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To attract the customers you want, you need to identify your target customers down to the last detail, and then craft a message that matches their pains, goals and aspirations. It’s easier to fill this existing demand than to create one.

Don’t just sell, educate your customers

According to serial entrepreneur David Skok, sales is often more effective when you have an existing relationship with a customer, and when you’ve already provided value.

This matches up with research from TARP Worldwide, which shows customers do enjoy receiving helpful recommendations on new information and products that will help them achieve better results.

Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime. Become your customers go to adviser on all things relating to your industry.

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For instance, if you’re in IT, be their IT Guy. Help them with choosing the best mobile plan, let them know about upcoming compliance regulations.

Go the extra mile. By understanding what your customers actually want, you can build relationships that are memorable and set you apart from the competition.

Focus on understanding each of your customers on an individual level and find out what really makes them tick, and why they like doing business with you.

Create freebies but don’t spend so much on them

Handing out discounts and freebies can be costly. Instead, you should embrace the art of the frugal wow — creating reciprocity through small, thoughtful gestures.

In fact, psychologist Norbert Schwarz found that as little as 10 cents can create reciprocity between two individuals (it really is the thought that counts).

Although reciprocity works incredibly well on it’s own, research shows it’s far more powerful when started by surprise.

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For a simple example, recall a time that someone did something nice for you unexpectedly — the gesture probably wasn’t all that unusual, but the fact that it came out of nowhere left a strong impression on you.

Thank you notes and proactive emails and messages are a nice, lightweight way to put this into action.

Many companies assume exceptional customer service can only be achieved by going above-and-beyond; that loyalty is built on showy gestures.

According to research from Dixon, Toman, and DeLisi, the true driver of customer retention and loyalty is the ease of getting a problem solved — delight isn’t the foundation of a customer service strategy, but rather a second-order effect.

Create quality service experience for your customers

You can’t build customer loyalty without an exceptional customer service to keep people coming back. Let’s debunk a few customer service myths, as well as tackle some important things you need to keep in mind when offering support online.

According to research, customers were nine times more likely to be engaged with a brand when they evaluated the service as “courteous, willing, and helpful,” versus the “speedy” evaluation, which only made customers six times more likely to be satisfied.

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Telling your team to spend more time with customers might seem like folly, but smart entrepreneurs know that isn’t the case.

Numerous behavioural psychology studies have shown that everybody views their service experience as more positive when they don’t feel rushed or ignored.

The never-ending pursuit of excellence to keep customers so satisfied that they tell others how well they were treated when doing business with you.

Moving the product or service you deliver into the realm of the extraordinary by delivering higher than expected levels of service to each and every customer.

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Key facets include: dedication to customer satisfaction by every employee; providing immediate response; no buck passing; going above and beyond the call of duty; consistent on-time delivery; delivering what you promise before and after the sale; a zero-defects and error-free-delivery process and recruiting outstanding people to deliver your customer service.

Frequent Communications helps in maintaining customer loyalty

Avoid losing your customers by building relationships and keeping in touch using a rolling calendar of communications.

This is a programmed sequence of letters, events, phone calls, thank you’s, special offers, follow-ups, and cards or notes with a personal touch etc.

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People not only respond to this positively, they really appreciate it because they feel valued and important.

It acknowledges them, keeps them informed, offsets post-purchase doubts, reinforces the reason they’re doing business with you and makes them feel part of your business so that they want to come back again and again.

Acknowledge the power of content

It’s obvious that your business won’t succeed if what you sell isn’t up to snuff. That’s why most companies focus 99% of their attention on their content, for their core product, service, or offering.

That’s great – but it’s insufficient to thrive in today’s competitive economy. “Just having a fabulous product or service is no longer enough for long-term success.

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You have to go beyond by creating a genuine relationship with your customers, and enabling them to connect with one another.

The downfall for many companies is that they don’t know how to keep customers. It seems this is the pot of gold at the end of the rainbow and few firms find it.

Remember special occasions

Send regular customers birthday cards and holiday cards. Try not to be boring (like all the other companies).

If you can make these special cards or gifts unique in your own way, that will go a long way to building customer loyalty.

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Use your creatively and find a way to tie the gift ideas into your business, the customers’ business or his or her personal life.

Make promises you can keep to help in maintaining customer loyalty

The bad news is that there doesn’t seem to be one particular foolproof method. If there was, everyone would be doing it.

Firms that can boast great success in their customer retention endeavour often have one thing in common though – great customer service.

It’s no good promising a customer the world at your initial meeting if three months down the line they discover you don’t have the manpower, skills or knowledge to go about fulfilling your pledges.

You have to make promises you can keep and be able to provide what the customer demands. And you must do it better than any of your competitors.

As all great gurus will tell you, the first thing you need to do is look within. In this case, that means within your business.

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Employing staff who are enthusiastic and who actually know what they’re talking about will do wonders for the reputation of the firm.

How many times have you walked into a shop and asked for some advice, only to be met with a blank stare from the shop assistant?

It’s frustrating if the customer contact person has no clue about what they’re actually selling – so staff training is key.

In fact, staffs are frequently listed as a company’s biggest asset and, as such, they deserve a good chance to develop in their roles.

Business representatives need to be taught to exercise good judgement and take the initiative when it comes to problem solving.

Make sure you communicate well, too, with a customer magazine or newsletter to keep customers well-informed.

An employee newsletter is also an effective way of keeping staff informed of new products, changes and good practice.

Rewarding loyalty

Tried and tested methods of customer retention also involve rewarding people for their loyalty and giving customers something tangible – a real reason to come back to your firm.

Incentives to return could include add-ons, vouchers, loyalty discounts or cards, special pricing and bonuses and gifts for ordering through a website.

Above all, keeping customers happy should mean that actions speak louder than words. A proven rather than promised commitment will put you way ahead of the competition.

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Building customer loyalty is hard, but it is one of the most important things for your business.

Maintaining customer loyalty, can cost nearly seven times more to acquire new customers than to keep existing customers.

Benefits

There are other associated benefits to fostering a lasting relationship with customers, including the fact that long-term customers are more likely to introduce your business to others via a verbal referral.

They’re more likely to purchase other products from you and if they’re completely happy with the service they’re getting then why would they even think about switching to a competitor?

If the business is maintaining good customer relations and keeping people loyal and satisfied, this also creates a happy workforce, with increased job satisfaction.

Look at it this way: if the customer has been loyal to the company for some time, he or she will require less help and have fewer problems to deal with.

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Clearly there are a great many benefits to keeping hold of current customers.

But modern customers are smart – they’re not happy to deal with you simply because they know you or your office is nearby or even because it’s the easiest option.

These days, people know how to get the best deal and will be happy to pop off to a competitor quicker than you can say “nice if you don’t give them what they need.

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Conclusion

There are many tactics, but no shortcuts; you can’t “hack” a personal relationship, so why should we assume business relationships are any different?

Truth is, the tactics above should hopefully give you some fresh ideas for approaching retention, but they’re not a cure-all. Your product and service will do most of the heavy lifting in keeping customers loyal, and there are no shortcuts for that.

The average business loses around 20 percent of its customers annually simply by failing to attend to customer relationships.

In some industries this leakage is as high as 80 percent. The cost, in either case, is staggering, but few businesses truly understand the implications.

Imagine two businesses, one that retains 90 percent of its customers, the other retaining 80 percent. If both add new customers at the rate of 20 percent per year, the first will have a 10 percent net growth in customers per year, while the other will have none.

Over seven years, the first firm will virtually double, while the second will have no real growth. Everything else being equal, that 10-percent advantage in customer retention will result in a doubling of customers every seven years without doing anything else.

The consequences of customer retention also compound over time, and in sometimes unexpected ways. Even a tiny change in customer retention can cascade through a business system and multiply over time.

The resulting effect on long-term profit and growth shouldn’t be underestimated.

A successful marketing strategy will bring customers through the door, but only a successful customer loyalty and retention plan will keep them coming back for more. Never take customer loyalty for granted.

About
Faith Kure

Comments

Delighted and loyal customers will return for follow-on business without considering alternatives of comparing the competition. There is a number of factors that influence customers decisions to remain loyal, true loyalty is based on our company’s continuous delivery of superior value. Customer loyalty is a major contributor to sustainable profit growth.

Customer satisfaction is a critical component of our sustainable profitability and growth. To make customer service an essential part of our corporate culture and produce empowered and motivated employees who are committed to ever higher standards of customer service and satisfaction we must demonstrate continuously that in our company’s order of priorities, customer service comes before all else. Eventually, thanks for reveling a light on this topic.

Customers are the life blood of every business and once you have devised a means to retain their loyalty, you have no worries. Going with the statistics of how much more it takes to retain existing customers compared to attracting new customers. Hence, trying to keep them is a wise decision. All the same, thanks for sharing with me.